The "Golden Age" of (MS) PC gaming was about 92-98: That period between when the Atari ST and Amiga had ridden into the sunset and specialized gaming hardware (=video cards) came in.
Generally speaking, a computer manufactered within a couple years of a game release could play that game. Some would work less well than others, and PCs were always a configuration nightmare.
Graphics Accelerators are great, but they had an unintended consequence: at the moment of purchase, the buyer had to decide whether this would be a "gaming PC" or not. Over time the cost of specialized game hardware, particularly video cards, has increased. While this is super cool for the gamer who wants to play the hottest titles in 1920x1200 8xFSAA on his Quad-SLI setup, it is a problem for the market: think of all the computers -- even new ones -- that can't play the current generation of games.
So I would hazard that while the number of PCs in households in the major markets has slowly increased since the mid-Nineties, the number of those PCs that are capable of playing current-generation games has dropped off noticeably.
Meanwhile, the costs for development of current-generation games have increased. Higher resolutions and hardware capacity means more artwork.
The price has remained stable.
That is not a good mix. And if you look at console sales, you'll see that consoles sell a lot more titles.
Will PC games disappear? I don't think so. But the market is already moving to certain poles:
A) Casual Games. Lower development costs, a wider range of PCs can play them.
B) MMORPGs: for the Massively Multiplayer Online Chatroom, nothing beats a PC. Use standard addiction psychology to develop a huge user base, and they won't care if the graphics aren't supercool. And a box purchase+subscription model makes the most of the lifestyle.
C) Niche markets: simulations. The open hardware model of the PC makes it a necessity for sim freaks.
